Angola - Economic development





In March 2003, the South Africa-Angola Chamber of Commerce (SAACC) was established with the potential of channeling considerable investment from South Africa. In 2003, major South African investors included the construction company Grinaker-LTA, Investec Bank, Securicor Gray and the Shoprite Supermarket chain. In May 2003, Total FinaElf announced a major offshore oil discovery and awarded contracts totaling $780 million to the French oil services company, Technip, for its development.

With the exception of the petroleum industry and possibly the fishing industry, economic development in Angola depended upon a political settlement of the civil war, which came in 2002. The diamond industry was no exception to this rule. In 1997, the Angolan state diamond enterprise, Endiama, provided for the establishment of a UNITA-backed mining company, SGM. Although the government initially granted SGM the right to prospect, UNITA claimed that the government was attempting to gain control over its mining operations. The continuation of the Angolan civil war began shortly thereafter (1998), with diamonds acting as the UNITA rebels' main source of income. The termination of the UN mission to Angola in early 1999 spelled disaster for any form of economic growth during the following years.

In 2000, Angola entered into a Staff-Monitored Program (SMP) with the International Monetary Fund (IMF). Although the program lapsed in 2001, the IMF remained engaged in the country. The World Bank prepared a Transitional Support Strategy (TSS) as a short- to medium-term plan for involvement in Angola. In 2002, the IMF reported that $900 million had disappeared from government finances in 2001. That amount was greater than the value of humanitarian assistance sent to Angola in 2002. In all, over $4 billion was unaccounted for from 1997–2002.

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